Horizons newsletter – Week 33 // 2017
Horizons is a bi-monthly Dasym Research initiative to show you how the Dasym themes have been in the news. We publish the Horizons on our website and as an email newsletter. If you wish to receive the email, please contact Investor Relations.
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The roots of conflict
The natural environment is playing a growing role in global tensions. Prior to the Syrian civil war for instance, the country experienced a drought from 2006-9. This drove many people from their farmlands to the cities, where they later rebelled against Assad. Poor harvests in Russia in 2010 led to a ban on exports that increased food prices in North Africa where the Arab Spring started the following year. From Ethiopia to Central Asia there are conflicts over water. In the future, conflict over food and water will only increase. Ethiopia and the DRC for instance will triple in size over the next three decades and in the course of this century the population of Nigeria will surpass that of the European Union. The good news is that such conflicts are not necessary. There is a vast opportunity to improve the access to food and water by digitalizing the entire supply chain of nutrition. Through better logistics, precision farming and blockchain applications, waste could be reduced (globally 30%) and productivity increased, thereby tackling conflict at its roots.
Creating time, experiencing happiness
In the past few decades, many countries escaped poverty and the emerging middle classes began to consume more material goods. This, however, created a new kind of poverty: ‘time famine’ that led to new kinds of unhappiness as new research shows. For example, when a household’s income rises, they often experience a feeling of ‘time stress‘: too little time to do what they can and want to do. Furthermore, individuals who spend their money on ‘time-saving services’ tend to be happier than those who spend their money on material goods. However, happiness itself tends to come in two ways: psychological experiments show that material goods provide more frequent, momentary happiness, while experiences generate more intense and longer-lasting happiness over one’s lifetime. In our rushed and fugitive modern-day lives time has become a scarcity. Apps, services and devices that ‘create time’ by helping us to manage our time more efficiently, like smart refrigerators or self-driving cars, allow us to spend our free time on the experiences that eventually make our lives more meaningful and happier.
Moving from cash to digital payments
Once Sweden was the first country to introduce banknotes. Today, paying in cash is largely passé. Since 2009, the number of coins and banknotes in circulation has fallen over 40%. Cash is used for only 15% of transactions at the point of sale; it is displaced by card and mobile payments (through payment app Swish). Other advanced economies (e.g. France, Canada, U.K.) are also aiming to reduce cash transactions, as digital payments are deemed safer, more convenient, and reduce organized crime and tax evasion. While people in the West can choose their preferred payment method, most of the developing world still relies on cash. In India – where 90% of transactions were in cash – Prime Minister Modi removed 86% of the nation’s currency supply from circulation. Although clumsily executed, the effort to fight corruption and regulate the ‘black’ economy, while enhancing financial inclusion by setting up a digital payment system, is starting to show positive effects. Contributing to the fact that digitization of payments can be a driver for financial inclusion, as countries such as Kenya and China have demonstrated.